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On preference imprecision

Author

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  • Robin Cubitt
  • Daniel Navarro-Martinez
  • Chris Starmer

Abstract

Recent research invokes preference imprecision to explain violations of individual decision theory. While these inquiries are suggestive, the nature and significance of such imprecision remain poorly understood. We explore three questions using a new measurement tool in an experimental investigation of imprecision in lottery valuations: Does such preference imprecision vary coherently with lottery structure? Is it stable on repeat measurement? Does it have explanatory value for economic behaviour? We find that imprecision behaves coherently, shows no tendency to change systematically with experience, is related to choice variability, but is not a main driver of the violations of standard decision theory that we consider. Copyright The Author(s) 2015

Suggested Citation

  • Robin Cubitt & Daniel Navarro-Martinez & Chris Starmer, 2015. "On preference imprecision," Journal of Risk and Uncertainty, Springer, vol. 50(1), pages 1-34, February.
    • Handle: RePEc:kap:jrisku:v:50:y:2015:i:1:p:1-34
    DOI: 10.1007/s11166-015-9207-6
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    References listed on IDEAS

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    More about this item

    Keywords

    Preference imprecision; Imprecision intervals; Noisy preferences; Violations of expected utility theory; Construct validity; D81; C91; D01; D03;
    All these keywords.

    JEL classification:

    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles
    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles

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